Inventory Forecasting in Excel [6 Easy Steps]
To help your finance team better plan for demand and forecast inventory in Excel, we've created a free guide and video. Once you have downloaded our template, follow these step-by-step instructions on how to plan, manage and forecast inventory in Excel.
1. Select Planning Year Period
- Open the template and begin by selecting the planning year and period you want to work on.
- For example, you can start planning for the year 2024.
2. Input Product Demand
- Navigate to the input section where you can enter the demand for your products by type.
- This section helps you plan based on the expected sales volume of different product types.
3. Set Up Minimum Order Quantities
- Define the minimum order quantity for each product. This is usually specified per pallet or other units depending on your requirements.
- Adjusting these settings helps maintain efficiency in inventory management by ensuring you order optimal quantities.
4. Adjust Time Lag for Deliveries
- Set up the time lag for deliveries, which is the delay between ordering and receiving products.
- Choose a suitable time lag to match your supply chain dynamics, such as selecting a one-month lag if that reflects your usual delivery timeframe.
5. Adjust Orders Based on Forecast
- The template will automatically update and forecast your inventory levels as you make changes to the demand, order quantities, and delivery lags.
- If there are issues like not meeting product demand in certain months (e.g., August 2023 and 2024), you can adjust the orders. For instance, moving orders from August to July to resolve shortages.
6. Review and Save
- Once all adjustments are made and all issues are resolved, review the entire plan to ensure it meets your business’s needs.
- Save the template and share it with your team for further input and implementation.
Why is Inventory Forecasting Important and How Will This Template Help Demand Planning?
Our Inventory Forecasting and Planning Template allows for efficient management of inventory levels and considers factors such as your product demand, order quantities and delivery timings. The template also automates much of the planning process, ensuring that your inventory levels are aligned with business demands.
But why is all of this important?
Inventory forecasting is crucial for managing business efficiency and profitability. Inventory forecasting helps with:
- Cost reduction
- Improved cash flow
- Efficient supply chain management
- Competitive advantage
- Risk management
Inventory forecasting and demand planning optimizes business operations across all levels, helping your organization reduce costs, increase customer satisfaction and improve operational resilience.
